School board will vote on 2 tax incentives

The Marysville Board of Education will consider two economic incentive packages for local businesses when it meets next month.

Eric Phillips, executive director of the Union County Economic Development Partnership and CEO of the Union County Chamber of Commerce, explained the proposals to the school board at its Thursday, April 17, meeting.

The first item would approve participation in an Economic Development Incentive Policy (EDIP) to help entice Heritage Cooperative Inc. to build a new facility in Marysville, while the other would add the area's new Meijer store to an existing tax-increment financing (TIF) district.

HCI plans to build an agriculture campus and research farm on 276 acres at 15090 Scottslawn Road. It would include a 2.5-million-bushel grain terminal, a 2-million-gallon liquid fertilizer tank, a 30,000-ton dry fertilizer warehouse and a research-and-testing facility.

The company, which is headquartered in West Mansfield and has a local facility on North Main Street, plans to create 20 new full-time and 15 new part-time jobs with an estimated annual payroll of $1.125 million.

HCI would invest approximately $38.5 million in real property improvements, making it one of the largest projects in company history. It also plans to invest $5.2 million in a rail spur and additional site improvements.

All eight taxing authorities within the EDIP must approve the incentive plan. They are: Union County, the city of Marysville, the villages of Plain City and Richwood, and Fairbanks Local, Jonathan Alder Local, Marysville and North Union Local school districts.

Phillips told the school board there is a proven track record on such plans.

The EDIP was approved in 2004-2005 based on the recommendation of the Union County Economic Development Action Plan. The policy uses various incentives to attract businesses, including enterprise zones, community reinvestment areas, municipal income tax rebates, infrastructure grants, industrial revenue bond financing, TIFs, loans and foreign-trade zones.

When the enterprise zones or community reinvestment areas are used and the annual payroll for the new business is more than $1 million, the city and school district must come to a revenue-sharing agreement. Marysville City Council approved a 75 percent, 10-year tax abatement for HCI at its March 13 meeting.

"In the state of Ohio, if you do a tax abatement, such as the agreement the city has with HCI, the city would have to give 50 percent of income taxes to the school district if the company's payroll exceeds $1 million on an annual basis," Phillips said.

After HCI's property tax abatement, Phillips estimated the district would receive $682,000 over the 10-year term, or $68,000 per year, from real property tax collection. The city would get $249,000 over the term.

If income tax alone was shared, Marysville schools could receive an increase of approximately $96,000 and the city would receive about $155,000 over the 10-year term, Phillips said.

HCI has also agreed to partner with the district to provide in-kind services such as curriculum development during the term of the enterprise zone agreement.

Meijer

City officials also want to include the new Meijer property in the Coleman's Crossing and City Gate TIF ahead of the store's August opening.

Ten years ago, the city and the developers of Coleman's Crossing created a TIF district to help fund the infrastructure needed to support a proposed Wal-Mart Supercenter, Home Depot, Honda Marysville dealership and a shopping center. Coleman's Crossing was started by Mike Dever, the majority owner of Honda Marysville.

At the time, the city estimated about $8 million would be needed to cover infrastructure costs. The city and Marysville schools worked together to approve a 30-year TIF to cover those costs.

However, the district map excluded the current Meijer property, which was then owned by New Beginnings Church, because churches are exempt from paying property taxes.

Last year, the church split the property, selling some of the land for the construction of Meijer and keeping the remainder for a new church building.

Connolly Construction, the owner of the area known as City Gate, proposed a new development with a number of additional businesses in 2007 and 2008. This required another $4 million in infrastructure, which was added to the TIF.

However, the 2008 recession slowed growth in both developments, Phillips said, so the TIF has been "challenged" at times to cover the debt service and the compensation to Marysville schools.

Phillips said the Meijer development has an estimated value of $10 million and could generate more than $5 million over the remaining 20 years of the TIF -- $2.4 million for the district and $2.6 million for city infrastructure.

"Adding the Meijer property (to the TIF) would allow the debt service to be paid. The school district would receive a compensation payment and maybe leave a little money leftover to make improvements on Coleman's Crossing Boulevard," Phillips said. "Maybe do a traffic signal at Industrial Parkway and Coleman's Crossing Boulevard and some other improvements that might encourage more development."

Phillips said the school district is the only entity getting money from the TIF.

"The county entities, everyone else, they're giving up 100 percent of their taxes into TIF. They're all going into the debt service for the infrastructure," he said.

The school board will vote on both resolutions at its regularly scheduled meeting at 7 p.m. May 15 at Edgewood Elementary School, 203 Grove St.